MINEX Forum

Tag: Poland

  • Poland’s industrial production and producer prices fall sharply in July

    Poland’s industrial production and producer prices fall sharply in July

    July industrial production fell by 2.7% year-on-year, well below the consensus forecast of 0.6%. There were yearly declines in all four major commodity groups, double-digit drops in mining and quarrying of 10.2%, and in manufacturing by 2.4%. Producer price deflation was deeper than expected, with July PPI falling 1.7% YoY against a consensus of -1.2%

    Poland’s industry saw a surprisingly weak start to the third quarter, although this coincided with dismal industrial PMI readings in Poland (43.5pts in July) and Germany (below 40pts in July).

    Year-on-year declines in industrial production in July were recorded in 24 of 34 industrial production divisions, the deepest in coal and lignite mining (by 27.7%), chemical products (9.6%), wood products (15.5%), paper (11.5%), metals (10.4%), and other non-metallic products (8.8%). The 10 divisions that saw an increase in production were led by machinery and equipment repair (up 20.7%), motor vehicles (15.0%), other transport equipment (8.1%) and machinery and equipment (4.9%). Production’s positive growth was driven by pro-export sectors.

    The deep fall in PPI producer prices was largely due to the statistical base effect and clearly lower energy prices than a year ago, but also reflected weakness in demand. A similar picture emerged from Germany’s July PPI reading. On a monthly basis, Polish manufacturing prices have been falling since November, and we expect PPI deflation to continue at least until the end of the year, which should facilitate further CPI disinflation.

    Available leading indicators (PMIs, new orders data) do not suggest a rapid recovery in manufacturing, although the most acute phase of inventory reduction by Polish companies seems to have passed. This week the preliminary August PMIs for the eurozone and Germany will be published; our forecasts do not assume a significant improvement compared to July. The economy of Poland’s largest trading partner is balancing between stagnation and recession.

    We expect that industrial production in Poland will remain low in the third quarter and experience a more visible rebound in the fourth quarter.

    Poland’s industrial production, YoY changes, in %

    Source: ING based on CSO data.
    ING based on CSO data.
  • Joint Venture Submits Application For Decision-In-Principle On New Nuclear At Patnow Coal Site

    Joint Venture Submits Application For Decision-In-Principle On New Nuclear At Patnow Coal Site

    A Polish joint venture company has submitted an application for a decision-in-principle on the construction of a nuclear power plant consisting of at least two South Korean-supplied APR1400 reactors with a target date for commercial operation of 2035.

    PGE Pak Energia Jadrowa, a joint venture between state energy group PGE and private energy company Ze Pak, said the application was submitted to the Ministry of Climate and Environment for a nuclear power station at a coal site in the Patnow-Konin region of the Wielkopolska province in central Poland.

    PGE Pak Energia Jadrowa was formed earlier this year to be responsible for all aspects of the project to build at least two South Korean APR-1400 pressurised water reactor units at the Patnow coal plant site, including an initial feasibility study, site surveys, an environmental impact assessment, licensing procedures and securing of financing.

    In January, a Korea Hydro & Nuclear Power (KHNP) official said it would be feasible to deploy up to four of the company’s APR-1400s at Patnow.

    The site has two coal-fired power plants in commercial operation with a combined output of about 1,100 MW, which makes it one of Poland’s largest energy facilities.

    Ze Pak, which owns the Patnow site, has been looking at nuclear energy as an option to decarbonise its generation portfolio. The company operates four power plants in Poland and has interests in lignite mining.

    In October 2022, Ze Pak and PGE signed a letter of intent with KHNP for eventual deployment of APR1400 plants at Patnow.

    PGE said two reactors could provide Polish homes and businesses with about 22 TWh of energy, or about 12% of today’s energy consumption in Poland.

    Crucial Step In Planning Process

    The company said obtaining a decision-in-principle is crucial for starting further works related to the location, environmental studies and finally applying for a permit to build a nuclear power station.

    Jakub Rybicki, president of PGE Pak Energia Jądrowa, said: “We are starting negotiations with our Korean partner regarding the feasibility study, agreements on financing our project and the creation of a Polish-Korean company that will directly lead this process.”

    Poland is bullish on nuclear and a number of projects have begun to develop large-scale plants and small modular reactors.

    In July the climate ministry approved plans for the country’s first commercial nuclear power station, which will be built in Pomerania in the north of the country with for Westinghouse-supplied AP1000 plants.

    The ministry has also issued a decision-in-principle for copper and silver producer KGHM Polska Miedz’s plan to build a NuScale Voygr SMR plant with a capacity of 462 MW.

    KGHM wants to explore the deployment of SMR technology to repurpose or replace existing coal-fired power plants and provide electricity and heat for its industrial processes.

    KGHM said that by 2030, it wants 50% of the electricity it uses to come from its own sources.

  • Poland nears coal glut prompting powerful union to raise alarm

    Poland nears coal glut prompting powerful union to raise alarm

    Poland’s hard-coal reserves have almost doubled since last year, prompting a powerful union to warn about the consequences for the country’s own miners just months before a tightly contested parliamentary election.

    “We hear that state companies import large amounts of coal, while coal extracted from Polish mines is not being collected,” Boguslaw Hutek, the head of the powerful Solidarity miners’ union, said in a statement. “State-owned companies should not act against the interest of each other.”

    Coal stockpiles jumped 83% to 10.8-million tons in May from a year earlier, according to energy think tank Instrat. The government in Warsaw, which banned Russian coal imports in March 2022, prompted state-run energy producers to import heavily from countries like Colombia, Kazakhstan and South Africa to avoid shortages.

    Coal has long been politically important in Poland, where 75 000 are employed as miners and millions of households depend on the fuel for heating. Aging coal plants provide about 70% of the nation’s electricity.

    Poland is poised to hold its parliamentary election in October. Opinion polls have shown the two main parties short of the support needed to rule independently, putting smaller parties in the position of potential kingmakers after the election.